Special Report on
Measuring the NAIRU
Measuring the NAIRU - Trends
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Standard estimates of the NAIRU or natural rate of unemployment are subject to considerable uncertainty. We show in this paper that using multiple indicators to extract an estimated NAIRU cuts in half uncertainty as measured by variance. The inclusion of an Okunâ€™s Law relation is particularly valuable. We estimate the NAIRU as an unobserved component in a state-space model and show that using multiple indicators reduces both parametric uncertainty and filtering uncertainty. Additionally, our multivariate approach overcomes the â€œpile-upâ€ problem observed by other investigators To download: If you experience problems ...
-In the long run, increases in the labor force should be matched by changes in employment (so as the population grows, more people should get hired for more jobs) -In the short run, changes in the labor force may not match population growth In Canada, the supply of labour has increased because of increases in the population (probably due to immigration), an increased rate of labor force participation, and an increase in education. Demand for labor has also increased due to new technology and economic growth. In most years, new jobs are created to replace old jobs and provide new jobs for ... Read More